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  • US-China trade dispute affects passenger demand: IATA

US-China trade dispute affects passenger demand: IATA

Ongoing trade tensions between the USA and China are affecting airline passenger demand in those regions, IATA's latest traffic report shows.

While airlines' efficiency improvements helped boost global load factors in June to record levels, IATA found that growth was weaker year-over-year as the market grapples with the US-China trade tensions and other regions' economic uncertainty.

"Ongoing trade disputes are contributing to declining global trade and slowing traffic growth," IATA director general Alexandre de Juniac states. "These developments are not helpful to the global economic outlook. Nobody wins a trade war."

Global passenger airline demand rose 5% year-over-year in June, IATA reports. Capacity increased 3.3% for the month, and load factors rose 1.4 percentage points to a June record of 84.4%.

However, international demand growth in the North America and Asia-Pacific regions has cooled, notes IATA. International revenue-passenger kilometres (RPKs) in the Asia-Pacific and North America regions, while growing, have slowed on an annual basis when compared with the May figures. For Asia-Pacific airlines, this international demand growth is 4%. It is 3.5% for North American carriers.

"Trade tensions between the US and China have impacted passenger demand for both regions, as well as having adverse (indirect) implications for the broader 'Within Asia' market," IATA's report says.

Domestic Chinese growth rose "modestly" in June, at a rate of 8.3% year-over-year. "However, with growth previously running at a double-digit rate in the not-so-distant past, the impact of the slowing of the Chinese economy on passenger demand is clear," IATA warns.

The USA and China have each introduced tariffs on imported goods from the other. More recently, China has let its currency weaken.

Africa and the Middle East were the regions showing the strongest year-over-year growth in June, with demand rising 11.7% and 7.8%, respectively.

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